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Getting the most from your training dollars.

Getting the Most From Your Training Dollars

Public accounting clients demand quality service, yet they often choose their accountants based on price. Accounting firms rely on high productivity to provide price-competitive, quality products. Staff training contributes to bottom-line results through enhanced productivity and quality, but few firms formally assess training costs and impact. To achieve greatest effect from their training dollars, firms should systematically evaluate training and how it contributes to their competitive advantage.

Needs Determination

Cost effective training meets firm-specific needs based on input from staff, managers and external sources. Some training needs are obvious: recent graduates must bridge the gap between classroom and practice; tax staff must update their knowledge to keep abreast of the tax code; reassigned staff often require new or additional skills.

Other training needs are less apparent since performance deficiencies may not be traced to technical inadequacy. Deficient performance can be knowledge based, but it is often related to motivation, communication or to management. Causes of performance deficiencies must be isolated to determine their remedy. For instance, if poor supervision undermines performance, training is wasted if it is directed only to staff.

Performance appraisals supplemented by a "Training Needs Assessment" questionnaire aid in structuring effective training programs. Counseling sessions in which the views of both supervisors and staff are compared and reconciled should result in agreement on action, including required training, to correct performance deficiencies. Job changes and manpower planning provide opportunities to explore training needs by matching new functions with necessary skills. Similarly, changing business conditions dictate that firms restructure skills and technical competencies. Management must monitor client needs and environmental changes as clients tend not to wait for a firm to develop capabilities possessed by competitors.

Program Selection and Implementation

No one approach meets all training needs. Each alternative should be evaluated in terms of its time and cost requirements. The effect of similar programs varies and management should be informed consumers of training services. Management initially must decide whether to conduct training in-house or externally. In-house training tailored to the firm is highly effective if many staff members are involved, but it can be costly; nonetheless, program repetition generates savings.

If a need relates only to a few staff, training may best be externally provided. However, management faces a bewildering range of alternatives: consultants, programs sponsored by accounting societies, offerings by other professional associations and university sponsored courses. The following points should be considered in evaluating alternatives:

1. Does the program correspond

to the training need? 2. Are the instructors

competent and knowledgeable? 3. Is the training approach


Failure to match the firm's training needs to program content wastes resources. Training groups may promise global benefit to participants, but firms must assess whether the program will meet their unique needs and fulfill part of the training agenda that has been defined through needs assessment. Firms that naively respond to marketing "hype" are likely to waste training dollars.

Program quality varies and training literature may provide inadequate description for management to assess value. Unless firms are able to check recommendations of previous participants, the best indicator of program quality is the qualifications of the instructors. However, good results are unlikely if program structure and the firm's training objectives fail to correspond.

In general, if the training objective relates to specific technical expertise, the training format should emphasize active participation of trainees and repetition. A lecture coupled with videos followed by programmed exercises results in more effective learning than will a stand-up lecture. Conversely, if training objectives relate to the development of interpersonal relations, programs failing to emphasize group dynamics and team-building exercises will be ineffective.

When training objectives are highly specific, such as learning to use a computer spreadsheet, the programmed learning approach is effective. However, the materials are costly to develop for firm-specific applications, and off-the-shelf training material may not be well-tailored to a given firm's situation. Further, participants must be self-directed and able to apply knowledge gained with little additional direction.

Results Assessment

Identifying training costs and quantifying benefits are imprecise activities. Cost identification is the simpler part of the measurement model. Firms should assign accounts for training and establish administrative procedures so that charges are properly made to those accounts. This works well for directly identified or attributable costs but may not accurately reflect the opportunity costs of staff and manager time. Internal reporting systems that track staff time are subject to manipulation. Managers may be tempted to attribute excess time to training rather than to dead time. Time not representing a true cost should be excluded from the cost/benefit matrix.

Training benefit is measured by determining whether the program accomplished the firm's objectives. The value of training is determined in advance by management, and the benefits assessment attempts to evaluate whether prior decisions were appropriate. Participant evaluation of programs, presenters and benefits should be mandatory. This evaluation should be compared with the training needs specification and the original training objectives.

When management addresses whether training is cost effective, it is forced to also consider the underlying rationale for training and the decisional process that was applied to determine the specific activities in which to engage. Training outcomes must be evaluated against costs to adjust future training. Whether management's estimates of costs and benefits are accurate is a secondary consideration to whether management performs a systematic and ongoing assessment of the firm's training programs. The resources devoted to training ought to contribute to firm quality, competitiveness and success. It is up to management to establish the systems and controls to assure that training dollars work for the firm.

Steven A. Fisher is an associate professor of accounting at California State University, Long Beach. He earned a DBA from Kent State University and has published extensively in accounting and business journals. Gary B. Frank, PhD, is an associate professor of accounting at the University of Akron. He received his doctorate from the University of Illinois. He has published widely and has extensive experience in management development and training.
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Title Annotation:accounting firms
Author:Fisher, Steven A.; Frank, Gary B.
Publication:The National Public Accountant
Date:Nov 1, 1990
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